Microsoft hopes to sell its Mediaroom IPTV platform to Ericsson

It was a rumor, but now it’s reality: Microsoft is to sell its Mediaroom IPTV business to Ericsson. The financial terms of the deal have not been disclosed.

The deal should go through in the second half of the year, the companies said in a statement on Monday. According to a separate blog post by Yusuf Mehdi, strategy head at Microsoft’s interactive entertainment division, the sale will allow Microsoft to “commit 100 percent of its focus on consumer TV strategy with Xbox” – bear in mind that the next-generation Xbox is expected to be unveiled in the coming months.

Mediaroom is a telco-oriented, customizable IPTV platform that should be a good fit for Ericsson, a company that already sells networking equipment and services – including IPTV equipment and services – to telcos. There are more than 40 existing Mediaroom customers, including AT&T (who brands it as U-verse) and Deutsche Telekom (Entertain). According to the statement, Ericsson will have a market share of over 25 percent if the deal goes through.

As is customary for such sales, the deal will be subject to regulatory approval in various countries. Microsoft’s Mediaroom division employs 400 people, who are based in Mountain View, California.

According to Ericsson SVP Per Borgklint, “future video distribution will have a similar impact on consumer behavior and consumption as mobile voice has had”, and the transferring staff that coming with the platform will give Ericsson “senior competence and some of the most talented people within the field of IPTV distribution”.

Here’s an excerpt from Mehdi’s post:

“We are proud of the world-class engineering and business achievements within Mediaroom. They have a rich history of driving innovation in IPTV. As early pioneers, they built the infrastructure to stream video on limited bandwidth, and today they enable multiscreen entertainment experiences for pay TV subscribers. Mediaroom has contributed to the evolution of TV and powers 22 million set-top boxes today in 11 million subscriber households.

“With the sale of Mediaroom, Microsoft is dedicating all TV resources to Xbox in a continued mission to make it the premium entertainment service that delivers all the games and entertainment consumers want – whether on a console, phone, PC or tablet.”